Stocks Tracker: European operators’ 2022 performance in review
In the first of a three-part series, EGR looks at some of the industry’s largest public firms and their annual performance in another tumultuous 12 months for the sector
Flutter Entertainment
2022 opening: 11,365p
2022 increase: +4.29%
Market cap: £20.1bn
A stellar 2022 for Flutter saw the London-listed operator record a year-on-year (YoY) rise in its share price. After landing a third consecutive number one spot in the EGR Power 50 rankings, the Dublin-headquartered firm looks monolithic in its status as the industry’s leading light.
The acquisitions of Tombola and top Italian operator Sisal wooed the markets, while strong growth in group financials, driven by the performance of FanDuel in the US, led to a healthy bottom line for company.
Group revenue in H1 2022 rose 9% YoY in constant currency (CC) to almost £3.4bn while pro forma revenue and average monthly players both increased 11% YoY in the third quarter of this year.
Changes at the firm’s UK and Ireland division, which has seen a swathe of redundancies handed out, was a blot on the firm’s calendar year. Difficulties in the UK, which have likewise been seen at fellow firms around affordability measures and the cost-of-living crisis, have hampered operations in the market.
Flutter recovered well after a difficult period on the stock market from March until August, before rallying to beat the industry trend to take its share price above the 11,000p marker which it had become so accustomed to. In fact, Flutter now has the most expensive shares on the exchange.
Source: Google
Entain
2022 opening: 1,687p
2022 decrease: -17.03%
Market cap: £7.82bn
A disappointing share price performance in 2022 for Entain should be abated by the positive outlook for the firm given the groundwork laid in the last 12 months.
As the group’s 23 consecutive quarters of double-digit net gaming revenue (NGR) growth finally ended in Q4 2021, 2022 has been a year to reset expectations.
Online NGR for H1 2022 slid 7% in CC to £1.5bn, which Entain pointed to tough Covid comparatives, but with a huge geographical spread, and a keen eye on Brazil when it eventually regulates, things could pick up.
Its US joint venture with MGM Resorts International, BetMGM, continues to perform well and claims to have 25% market share when excluding New York. Questions remain over the future of the business, either in the shape of an IPO or MGM coming back with another bid for Entain.
Speaking of M&A, Entain moved for Dutch firm BetCity in June in a deal worth up to €850m, while it partnered with EMMA Capital to acquire Croatian operator SuperSport for an initial €800m in August.
However, despite the stalling stock market performance, RB Capital’s Julian Buhagiar notes Entain is an “interesting dark horse” and has argued its stock is undervalued.
Writing for EGR, Buhagiar said the expansion of sports betting in the US, along with Entain’s penchant for snapping up smart targets via M&A, meant it was in good stead, and well equipped to ride any issues arising from upcoming regulation in the UK.
Source: Google
888
2022 opening: 304.80p
2022 decrease: -69.41%
Market cap: £380.41m
A hugely difficult year on the stock market for 888 was probably not what the operator was expecting after acquiring William Hill International from Caesars in a £1.95bn earlier this year. The move has been repeatedly described as “transformational” by 888, but with these synergies yet to be seen, the market hasn’t been too kind to the London-listed firm.
A huge pile of debt, touching the £2bn mark, is set to be further compounded by rising interest rates and downturns in the UK (as previously mentioned for Flutter and Entain) is a double-edged sword for both 888 and William Hill.
The UK is the biggest market for both, and with the harsh Covid comparisons, the rising cost-of-living and affordability measures has made for a tough 12 months, despite the firm jumping to fourth place in the EGR Power 50.
CEO Itai Pazner recently spoke to EGR about his vision for the combined business and insisted the future was bright.
He touched on the limbo the Hills business had found itself in after initially being acquired by Caesars before being offloaded to 888, as well as the merging of staff and senior leaders meant there was a settling in period.
Pazner said: “The most exciting elements, and we’re seeing this almost on a daily basis, is that there are a lot of buckets of knowledge, experience and excellence that were created in the different parts of the group following the deal.
“After moving to one platform, all of those benefits will be much easier to exploit or enjoy. That’s the plan, to integrate quickly into the new platform while benefitting from the things which do not require integration to be profitable. There’s still a huge amount of what we call growth synergies or opportunities that we would like to exploit very, very quickly,” he added.
Source: Google
Betsson
2022 opening: SEK51.82
2022 increase: +62.69%
Market cap: SEK10.2bn
While London-listed firms overall struggled on the stock market in 2022, the Nordics was a much more successful arena for operators, especially Stockholm-listed Betsson which saw its stock soar by more than 60% YoY.
After a whirlwind 2021, which saw CEO Pontus Lindwall unceremoniously disposed of only to be reinstated following a board revolt led by his mother, 2022 has seen the operator rise above the mire of fellow stock crashes.
Q3 saw new highs for group revenue, operating profit (EBIT) and casino and sportsbook performance, which followed Q2 highs for revenue, sportsbook revenue and casino turnover fuelled by growth in Latam and CEECA (Central and Eastern Europe and Central Asia).
Latam and CEECA, both growing regions in the industry, have been happy hunting grounds for Betsson, which has championed its geographic spread as a key differentiator for the business.
A B2B showcase offering in the US via its Betsafe brand in Colorado looks to be an astute piece of business, with the market championing Lindwall’s approach, further compounding the outlandishness of the decision to oust him in the first place.
Source: Google
Kindred Group
2022 opening: SEK108.75
2022 increase: +8.97%
Market cap: SEK25.03bn
While Kindred’s 25th year of operations may have been somewhat difficult in terms of financial return, there have been some shining lights for the operator, including some victories in regulatory tussles and its share price performing well.
Recent joy came in Norway after the regulator dropped its threat of daily fines as Kindred removed all its Norwegian-language advertising, allowing it to continue to operate in the monopoly market.
Kindred also had the added benefit of the Norwegian government backing it up, with the state noting the operator was able to do business legally in the country.
Boosts also came after the group netted its Dutch licence in July, with Unibet.nl performing well so far with hopes to regain a market lead in 2023 in the pipeline.
The dips in financial performance this year, impacted largely by the Dutch absence from 1 October 2021 until July, have been difficult to swallow, but with a refocus on its US operations, including pulling out of Iowa, Kindred looks to be on good footing for 2023, should the financial dips arrest in due course.
Source: Google
All data accurate as of market close on 19 December